Escrow System in Your Reverse Auction WordPress Website

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An Escrow System for WordPress

Bill is looking to hire a contractor, to paint his house. You’re interested, and would be willing to take up the job. The task at hand is substantial, so the cost would be high as well. Bill is ready to pay the entire amount, once the job is done. He says he’s someone who keeps his word. Hmm!

Would you take up Bill’s task?

For this current scenario a contract would sound nice. Some sort of security. Agreed, Bill has given you his word, but you’d prefer them written somewhere, preferably on a legal document. May it be for any sort of service. In fact, having a contract works the other way around as well, to protect the client. A contract secures the client, (in this case Bill), in case the task was abandoned, but payment was made.

A security of this sort, which introduces a contractual obligation, can be put in place using an Escrow system. And when the services happen online, the system you’re looking for is Internet Escrow.


What is Escrow?

An Escrow is a third party system, which manages the amount to be paid, during a service transaction. It’s primary responsibility is to receive and disburse money, to the intended party. What happens is, when a client hires a service provider to complete a certain task (Bill, you, the painting job), the promised amount is deposited into Escrow, by the client (Bill). This money is then handed to the service provider (you), once the job is marked complete by both parties. The payment could be divided across several milestones as well, if needed.

Escrow systems handle disputes as well. In case a dispute arises, a different route is taken. An issue is raised, the resolution of which decides, which transacting party should receive the money.

Who would need to Use the Escrow System

The use of an Escrow agent could be made for

  • Reverse Bidding Website: Where clients are looking for service providers to complete an assigned task.
  • Crowdfunding Projects: When developers are looking for backers for a particular project being built.
  • Auction website: The usual auctions website, where buyers bid for a particular product. The money can be saved in an Escrow account till the product is delivered.
  • e-Commerce Site: For any online purchase, where money has to be kept securely, until the product is delivered.


Can I Integrate Escrow into my WordPress website using a Plugin?

Why yes you can! And I understand that for many-a-businesses there is a need to do so. But there isn’t a readily available WordPress plugin. Not an accurately functioning one at least. But such a plugin can be built, if you know what happens behind the scenes.

The Workflow

To understand better, let’s take an example. Say you want to integrate an Escrow system for your Reverse Auctions website on WordPress. You have to go about doing the following:

    1. Select Escrow System: You have to first identify which Escrow system you want to integrate. There may be several providers of such a service. Some standalone providers include Others could be national banks, which provide Escrow accounts.
    2. Use API Provided: Once you have decided on a particular system, you need to use an API to communicate with the system. For example, there should be methods provided using which, you can create a new account, add amount (e.g., charge a credit card), disburse amount (to a bank account), handle disputes, provide refunds, and so on.
    3. Create a WordPress Plugin: The methods (stated above) have to be integrated into a WordPress plugin. To allow users to make use of the Escrow system, they have to be registered users on your WordPress Reverse Auctions website.
    4. Process Transactions: When a service has been put up for auction, the client has to deposit the decided upon amount into an Escrow account. Once an auction has been won, the client and the service provider, decide to enter into an agreement within Escrow. These can be done using APIs provided by your Escrow system. If the need arises, your website might need to be PCI compliant, to handle such transactions.
    5. Make Payments: When the client marks the service as ‘Complete’, the WordPress plugin should send across a request to the Escrow system, to pay out the money to the service provider. The payment will be usually credited to the party’s bank account.

To extend the working of the system, you need to have moderators to handle disputes and refunds. The Escrow system you choose, should also provide an option to issue such refunds. Along with this, a feature most website owners would need, is a possibility to charge a fee on every transaction made. These basic features and additional changes, could make the system quite complex as you can imagine. Additional measures have to be taken to make the system secure as well, since sensitive information is involved. But the idea as such, is not far fetched. There is a possibility provided to build an Escrow integration plugin for WordPress, provided, the Escrow system you choose co-operates. 🙂

Do let me know your thoughts and questions about such an integration plugin via the comment section below!



3 Responses

  1. Hi, Nice article. I am creating Reverse Bidding Website in India. BUT in India I am not able to use Escrow system. Could you please suggest me how can I implement a Escrow system in my wordpress website ?

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